February 25, 2009

Corn and soy declined on speculation that the worsening global recession will restrict demand for food, animal feed and alternative fuel.

The widening global recession has forced down corn prices for seven straight weeks, soy down in five of the past seven weeks while wheat fell for a third day.

The grains and oilseed complex was thought to be less sensitive to an economic slowdown, but it is no longer safe now as the global economy plunged so much and no one can see the end of this slowdown, according to Kawanabe Toshimitsu, an analyst at Central Shoji Co. in Tokyo, Japan.

Corn for March delivery fell 0.5 percent to US$3.50 per bushel at 3.23pm Singapore time, while soy for May delivery lost 0.2 percent to US$8.7425 per bushel.

Crude oil for April delivery fell as much as 2.1 percent to US$37.65 per barrel on the New York Mercantile Exchange. The decline may reduce demand prospects for corn and soy as a source for biofuel.

Wheat for May delivery remained unchanged at US$5.215 per bushel at 3.29pm Singapore time.